Thaindian News

Bangalore, June 21 (IANS) State-run BEML (Bharat Earth Movers Ltd) posted net profit of Rs.223 crore for fiscal 2009-10 as against Rs.269 crore in 2008-09, registering 17 percent decline year-on-year (YoY), the company said Monday.
For the fourth quarter (January-March) of last fiscal (FY 2010) too, net profit declined 8.6 percent to Rs.157 crore from Rs.172 crore in the previous fiscal (FY 2009).

Though net sales for the entire fiscal under review grew marginally 1.5 percent to Rs.2,838 crore from Rs.2,797 crore, it declined 5.8 percent in the last quarter to Rs.1,194 crore from Rs.1,263 crore in the same period of the previous fiscal.

“Net profit and net sales declined in fourth quarter due to non-execution of sales orders, change in product mix of mining and construction equipment business and loss of Rs.20 lakh incurred on every metro car sold on account of differential pricing policy and change in configuration,” BEML Chairman and Managing Director V.R.S. Natarajan told reporters here.

The company incurred a combined loss of Rs.19.20 crore on 96 cars it sold to Delhi Metro Rail Corporation (DMRC) after changing the design from broad gauge to standard gauge.

“Of the total 192 cars order we have from DMRC, we delivered 132 during the last two fiscal years,” BEML director for rail and metro coaches P. Dwaraknath told IANS on the margins of the company’s briefing on its performance in FY 2010.

Gross sales, including income operations grew 18 percent to Rs.3,558 crore in FY 2010 from Rs.3,013 crore in FY 2009.

The company’s rail and metro business grew by a whopping 114 percent during the fiscal on sale of 96 metro coaches as against eight in the previous fiscal and more wagons to the Indian Railways.

Owing to lower net profit, the company’s earnings per share (EPS) (basic and diluted) declined to Rs.53.51 from Rs.64.56 for the fiscal.

The defence business of the mini-ratna enterprise under the administrative control of the defence ministry, however, grew by only 14 percent YoY during the fiscal, while it’s mining and construction equipment business accounted for 50 percent of the total net sales.

“We have succeeded in maintaining the growth momentum in mining and construction equipment business despite a general decline in off-take the world over due to global meltdown,” Natarajan asserted.

The company plans to invest Rs.680 crore (Rs.6.8 billion) over the next two-three years on capital expenditure, including Rs.316 crore in setting up a aerospace manufacturing unit in the special economic zone (SEZ) near Bangalore, Rs.100 crore on an 18 MW windmill near Gadag in central Karnataka and Rs.100 crore in the part acquisition of state-run Mining and Allied Machinery Corporation (MAMC) at Durgapur, West Bengal.

In an open auction bid held last week, a consortium comprising Coal India Ltd, Damodar Valley Corporation (DVC) and BEML acquired the ailing MAMC for Rs.100 crore.

MAMC went under BIFR (Board of Industrial and Financial Reconstruction) after it slipped into red in 1992.

“We have 48 percent equity stake in the MAMC joint venture as against 26 percent each by Coal India and DVC. We plan to acquire majority stake (51 percent) for management control of the mining firm,” Natarajan said.

With an opening order book of Rs.5,206 crore, the company has set a sales target of Rs.4,200 crore for this fiscal (2010-11) and Rs.5,000 crore for next fiscal (2011-12).

Of the total order, mining and construction equipment accounts for Rs.1,100 crore.